China’s central bank this week shifted its approach on a few fronts as the country strives to expand its economy by 5% this year. Its similar target last year was the lowest in more than three decades.
The US Federal Reserve cut its benchmark rate by 50 basis points on Sept. 18 in a move going beyond tackling inflation to help boost employment. Also, Washington conditionally handed out some of its $7 billion in Biden administration funding for the domestic electric vehicle supply chain.
Beijing, which controls the world’s largest mining and metals industry, said it will start using asset prices and inflation to set monetary policy targets instead of credit growth. It also lowered the reverse repo rate, which sets the cost of short-term borrowing for commercial banks, by 20 basis points. It moved to cut interest rates on outstanding mortgages by 50 basis points, which could benefit 50 million households, it said.
